Rule Consolidation Project Update

The Canadian Investment Regulatory Organization (CIRO) is consolidating its Investment Dealer and Partially Consolidated (IDPC) Rules and Mutual Fund Dealer (MFD) Rules into a single, harmonized rulebook (the CIRO Rules).

This consolidation aligns with CIRO’s first three-year Strategic Plan1 and aims to deliver efficient, consistent, and scalable regulation for all Dealer Members.

Retitling the consolidated rulebook

In this publication, we have replaced all prior references to the “Dealer and Consolidated Rules” with the term “CIRO Rules” to:

• underscore that the consolidated rulebook applies uniformly to every Dealer Member,
• streamline and simplify all future communications, and
• highlight the integrated, harmonized nature of the new rules. Going forward, this nomenclature will appear in all publications related to this project.

1. Background

The below section provides a brief summary of key information provided in previous publications regarding the Rule Consolidation Project to date. For more details regarding any of the information in this section, please refer to the previous publications related to this project.

1.1 Primary objectives

CIRO is conducting the Rule Consolidation Project according to four guiding objectives:

• Rule Harmonization: minimize regulatory arbitrage between investment dealers and mutual fund dealers.
• Rule Consistency: ensure like dealer activities are regulated in a like manner.
• Rule Scalability: apply principles-based requirements to facilitate proportionate rules for Dealer Members of different sizes and business models.
• Rule Clarity: improve clarity of the rules applicable to all Dealer Members.

1.2 Rules structure

The CIRO Rules will be organized and numbered in the same manner as the existing IDPC Rules (see Appendix 1 for rule organization and numbering structure to be used).

1.3 Project Status and Timeline

The Rule Consolidation Project was published in phases to minimize stakeholder disruption. Each phase has been published for comment as follows:

2. Project updates

The following provides an overview of substantive updates regarding the Rule Consolidation Project since our most recent publication:

2.1 Parallel policy projects

The following approved rule amendments will be inserted in the CIRO Rules and included in the Rule Consolidation Project publications moving forward:

• Investment Dealer Proficiency Model: published in Bulletin 25-0110
• Enhanced Cost Reporting: published in Bulletin 25-0176

The following projects are continuing through the policy process in parallel to the Rule Consolidation Project:

• Continuing Education Programs: published in Bulletin 24-0356
• Fully paid securities lending and financing arrangements: published in Bulletin 25-0277
• Modernization of requirements for account transfers and bulk account movements: published in Bulletin 25-0199
• Mandatory close-out requirements: published in Bulletin 25-0001

If any of these projects are approved before the publication of the consolidated proposed CIRO Rules for comment, we will include the project’s rule amendments in the proposed CIRO Rules. Otherwise, these projects will be shown in grey boxes within the proposed CIRO Rules to indicate that they have been proposed but are still awaiting approval.

If these projects are approved after the publication of the proposed CIRO Rules for comment, the amendments will be included in the final version of approved CIRO Rules.

Housekeeping updates may also be required where additional amendments are needed to reflect approved parallel projects in the final approved CIRO Rules.

2.2 Extended comment period for the publication of the consolidated proposed CIRO Rules

In response to feedback received from Dealer Members consistently throughout the Rule Consolidation Project, we acknowledge the need for a comment period that adequately reflects the scale of the publication of the consolidated proposed CIRO Rules. As such, we intend to publish the consolidated proposed CIRO Rules for a comment period of 120 days. This is the longest comment period allocated to the project to date.

We believe the 120 day comment period provides Dealer Members with adequate time to review and consider the material updates to the consolidated proposed CIRO Rules, noting that all of the proposed Rules have already been published at least once for public comment.

2.3 Guidance Notes

Guidance Notes aligned with the proposed CIRO Rules will be developed and published once the CIRO Rules have been finalized and approved by the CSA. This includes any new guidance that is developed to address changes made to the proposed CIRO Rules.

CIRO has completed a preliminary inventory and review of existing guidance applicable to Investment Dealer Members and Mutual Fund Dealer Members and any new guidance that will be necessary to support the proposed CIRO Rules. This inventory categorizes the existing guidance based on the extent of the changes required. Accordingly, guidance that requires material changes to align with the CIRO Rules will be published for comment once the CIRO Rules have been approved.

2.4 Implementation approach

As previously established, we planned to implement the CIRO Rules in full rather than through a phased approach. However, pursuant to industry feedback, certain rules (specifically those related to the Approved Person regime) may require extended implementation timelines due to operational considerations.

In contrast, some areas, such as the procedural enforcement rules may be more appropriate for immediate implementation.

A detailed implementation plan will be formally published for comment in the publication of the entire proposed CIRO Rules.

APPENDIX 1

• 1CIRO’s Strategic Plan is available at the following link: CIRO Releases Three-Year Strategic Plan